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Entries Tagged as 'Bad Credit'

Benefits and Risks of a Land Contract

1,298 Comments · Bad Credit

A land contract can be an appealing option for a potential homebuyer who might have difficulty qualifying for a mortgage loan. But there are potential risks to be wary of as well.

Land contracts were a popular way of buying a home back in the 1970s and 1980s, but fell out of favor in recent years as creative financing made it easy for almost anyone to qualify for a mortgage.

However, they’ve been making something of a comeback lately as lenders have tightened credit requirements, sending some potential buyers in search of alternative financing.

A land contract is a fairly simple concept. The seller is financing the purchase instead of a mortgage lender.

Instead of taking out a mortgage, the buyer agrees to make regular payments directly to the seller, who still retains title to the property.

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Can You Still Get a Mortgage With Bad Credit?

No Comments · Bad Credit

Qualifying for a mortgage loan or refinance with bad credit is a lot harder than it used to be.

Given that widespread defaults on subprime mortgages triggered the financial meltdown of 2008, lenders have become much more cautious about who they’ll extend credit to.

That doesn’t mean it’s impossible to get a home loan with poor credit, but the minimum standards are higher.

You’ll likely find it a lot more costly to get a mortgage or refinance with less-than-perfect credit.

So what’s the bottom line? Your best bet for qualifying for a home loan. Either a purchase or mortgage refinance, with bad credit is either the FHA.

They will accept loans with FICO credit scores as low as 580, although individual lenders may require a minimum or at least 620.

The FHA and VA don’t actually write mortgages, they insure mortgages that meet their standards that are issued by qualified lenders.

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Can a Cosigner Help You Qualify for a Mortgage?

332 Comments · Bad Credit

If you’re looking to buy or refinance a home but are having trouble qualifying for the mortgage, you might consider getting a cosigner to help.

A cosigner is someone who puts their name on the mortgage to guarantee the debt will be paid if the primary borrower defaults.

Though more commonly used for lesser debts such as buying a car, cosigners can also be used to qualify for a mortgage.

You didn’t hear much about them during the years of the housing bubble, since credit was easy to get and few people needed one, but their use has become more common as lenders tightened their credit guidelines.

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How Soon After a Foreclosure Can You Buy a Home?

35 Comments · Bad Credit

If you give up your current home, how soon can you buy another one? With millions U.S. homeowners in trouble on their mortgages or even facing foreclosure, it’s a question that many are pondering.

It’s a particularly relevant question for homeowners who may be considering a “voluntary foreclosure;” that is, to simply stop paying the mortgage and give up the home because they owe more than it’s worth.

From their perspective, to continue paying a $450,000 mortgage on a home that’s now only worth $350,000, for example, is simply to throw good money after bad.

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Avoiding Credit Repair Scams

39 Comments · Bad Credit

With foreclosures and credit delinquencies mounting, more and more people are suffering damaged credit.

Even if they manage to avert losing their home, the mere fact of an initial foreclosure filing or missing mortgage payments can do serious damage to one’s credit rating, making it difficult or impossible for one to get the financing needed to buy another home, replace an old car or a worn-out major appliance, operate a small business, pay medical bills or meet other necessary expenses.

Credit repair scams often promise that they can get negative information deleted from your credit report for a fee.

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Bankruptcy Becoming a Desirable Solution

36 Comments · Bad Credit

A perfect indicator of the state of the U.S. economy is the escalating number of bankruptcy filings.

Many people overwhelmed with consumer debt and maxed-out credit cards are filing for bankruptcy at alarming rate. Experts believe the trend is only going to get worse.

Bankruptcy. For many, it’s an unthinkable fate, one that’s impossible in a land that rewards people for perseverance and hard work.

Yet after a few decades of addiction to credit cards and rising consumer debt, America is finding the number of bankruptcies on the rise.

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